1 BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 2 450 N STREET 3 SACRAMENTO, CALIFORNIA 4 5 6 REPORTER'S TRANSCRIPT 7 JUNE 25, 2019 8 9 10 11 ITEM K 12 OTHER ADMINISTRATIVE MATTERS; 13 ITEM K1 14 EXECUTIVE DIRECTOR'S REPORT; 15 ITEM K1(a) 16 OVERVIEW OF GOVERNOR'S BUDGET 17 18 19 20 21 22 23 24 25 26 27 REPORTED BY: Jillian M. Sumner 28 CSR NO. 13619 1 1 P R E S E N T 2 3 For the Board of Honorable Malia S. Cohen Equalization: Chair 4 Honorable Antonio Vazquez 5 Vice Chair 6 Honorable Ted Gaines First District 7 Honorable Mike Schaefer 8 Fourth District 9 Yvette Stowers Appearing for Betty T. 10 Yee, State Controller (per Government Code 11 Section 7.9) 12 For the Board of Brenda Fleming Equalization Staff: Executive Director 13 Steven Mercer 14 CDTFA Budget Officer 15 Leslie Davis President 16 California Assessors' Association 17 Toya Davis 18 Clerk Board Proceedings 19 20 ---oOo--- 21 22 23 24 25 26 27 28 2 1 450 N STREET 2 SACRAMENTO, CALIFORNIA 3 JUNE 25, 2019 4 ---oOo--- 5 MS. DAVIS: At this time we will take up 6 Item K1(a), the Executive Director's Report, an 7 Overview of the Governor's Budget by Ms. Fleming. 8 There is a speaker, Steven Mercer, CDTFA 9 Budget Officer. 10 This item does not require a vote. 11 MS. COHEN: Mr. Mercer, thank you for being 12 here today. 13 MR. MERCER: You're welcome. 14 MS. COHEN: Thank you. The floor is yours. 15 MS. FLEMING: So flexibility is our key 16 today, Members. And we thank you for your patience. 17 Looks like everyone is sort of bouncing around today. 18 So good morning, Chair Cohen and Honorable 19 Members. It's absolutely a pleasure to be here 20 today. Keeps us on our toes. 21 Thank you for the staff for your flexibility 22 and working with us. 23 So this month's report, Members, will 24 include updates on office relocation project, a 25 little bit of comment on the August 2019 Taxpayer 26 Bill of Rights Hearing, and development -- just a 27 little bit of an update on the development of the 28 white paper for the opportunities that you'd asked 3 1 about a month or two ago. 2 But the highlight of my presentation today 3 is coming from my guest and my friend Mr. Steven 4 Mercer. I've invited him to join me for a discussion 5 about the Governor's Budget. 6 Mr. Mercer is the Chief of the Financial 7 Operations for CDTFA. He's been in budget for 18 8 years. He started when he was five. He's a good 9 friend and he is instrumental in the budget 10 information in terms of expenditure reports, etc., 11 that we provide to you on a regular basis. 12 So what I've asked him to do is just kind of 13 join me a bit to have an overview of a couple of 14 aspects of the Governor's Budget; the Governor's 15 Budget itself for '19/'20, and a little bit about the 16 process. 17 When we say the Governor's Budget or the 18 state's budget, I'd like for Steven to walk us 19 through, as an expert in 18 years of experience here, 20 really what that means, and a little bit of a process 21 to give you an overview. 22 And of course, Members, as we continue to 23 meet on a weekly basis in our one-on-ones, I'll 24 continue to provide additional detail for you. 25 And with that, a little bit of background. 26 The Governor's Budget, Members, is somewhat more of 27 an ongoing process, even though there's annual 28 activities. 4 1 The ultimate result of that product is 2 commonly referred to as the state budget. The budget 3 process is formalized -- a very formalized process. 4 Because the dynamics of California are such that 5 there's so much going on, there's got to be a way to 6 formalize the process that deals with the state's 7 budget and their money. 8 The process starts early in the summer. And 9 Steven will walk you through a lot of the details, so 10 I don't want to steal too much of his thunder. 11 But when you mostly think about the budget, 12 we're talking about that January timeframe, January 13 10th, when the governor presents its budget in a 14 formal press conference. 15 But in terms of what we do for the 16 departments, that time actually backs up to really 17 the summer before. 18 So we'll walk you through that. And a 19 little bit more detail from Steven in his 20 presentation. 21 I'll draw your attention to the slide that's 22 behind you that we've put together just to give you 23 kind of a one-page travel document for reference that 24 gives you, in general, the time line for the budget 25 process. 26 All of this detail may not be specifically 27 important to you, but it's generally what we use as 28 sort of our governing document, along with many of 5 1 the budget letters that come from the Department of 2 Finance. 3 So I don't want to steal too much of your 4 thunder. 5 Steven Mercer. 6 MR. MERCER: Good morning, Members -- 7 Honorable Members, Madam Chair. 8 As Ms. Fleming said, my name is Steven 9 Mercer. And I'm the Chief of Financial Operations 10 for the Department of Tax and Fee Administration. 11 I worked in the Budget Office for the Board 12 of Equalization and the Department of Tax and Fee 13 Administration for 18 years. The last three of which 14 I was the Budget Officer. 15 Today I'm going to give you a high-level 16 overview of the state budget process. And it 17 definitely is a budget process. It's a cycle, and 18 there's always some kind of activity going on. So 19 it's kind of tough to find a good place to start. 20 But the best place that I can think of is the 21 Governor's Budget. 22 MS. COHEN: Thank you. 23 MR. MERCER: So there are many components to 24 this process. And the state constitution requires 25 that the governor submit a budget plan to the 26 Legislature by January 10th. This is known as the 27 Governor's Budget. 28 The Director of the Department of Finance, 6 1 as the Chief Financial Advisor to the governor, 2 directs the effort for the preparation of the 3 governor's proposed budget under the policy direction 4 of the governor. 5 The basic approach the state of California 6 utilizes is incremental budgeting. This approach 7 essentially uses the current departmental level of 8 funding as a base amount to be adjusted by change 9 proposals. 10 For nonagency departments, like the Board of 11 Equalization, proposals are presented directly to the 12 Department of Finance during the development of the 13 Governor's Budget in the fall. 14 After all decisions on the proposals are 15 completed, the Department of Finance coordinates the 16 printing of the Governor's Budget and the Budget 17 Bills. 18 There are two identical Budget Bills which 19 will be heard in each house of the Legislature. 20 Specifically is the Senate Budget and Fiscal Review 21 Committee and the Assembly Budget Committee that hear 22 the Budget Bills. 23 They assign the items in the budget -- in 24 the bill to several subcommittees, which conduct 25 budget hearings. These hearings generally begin in 26 late February, soon after the Legislative Analyst 27 issues the analysis of the Budget Bill. 28 The Legislative Analyst is appointed by the 7 1 Joint Legislative Budget Committee and is charged 2 with providing a nonpartisan analysis, and 3 recommendations for changes to the Governor's Budget 4 plan. 5 The Department of Finance proposes 6 additional adjustments to the Governor's Budget 7 through finance letters in the springtime. 8 By statute, the Department of Finance is 9 required to give the Legislature all proposed 10 adjustments to the Governor's Budget, other than the 11 May revision, by April 1st. 12 The traditional May revision adjustments are 13 due by May 14th, and consist of an update of general 14 fund revenues and changes in expenditures for 15 school-funding requirements, pursuant to Proposition 16 98, and changes to caseload, enrollment or 17 population. 18 Now, when one of these subcommittees, when 19 they complete their tasks in late May, they report 20 these recommendations to the full Budget Committee of 21 its house. 22 Upon adoption of the budget by the full 23 Budget Committee, a recommendation is made to the 24 floor of the full house. 25 Upon simple majority vote of the house, the 26 Budget Bill is passed to the other house. A Budget 27 Conference Committee is then appointed to work out 28 differences between the Senate and Assembly versions 8 1 of the bill. 2 Upon completion of action by the Conference 3 Committee and the simple majority vote, this 4 conference version is then sent to each of the two 5 houses for approval. 6 When the Budget Bill receives a simple 7 majority vote in each house, it is passed on to the 8 governor. The constitution allows the governor to 9 reduce or eliminate an item of appropriation through 10 a veto. 11 Once the governor signs the Budget Bill, the 12 Department of Finance publishes three documents upon 13 enactment of the Budget Act, California state budget 14 summary and veto message package, the final budget 15 summary, and the final change book. 16 The Budget Act becomes the law on July 1st 17 when the state's fiscal year begins. 18 On the administration of the budget, the 19 Budget Act is the primary source for appropriations 20 for departments. Departments have the primary 21 responsibility to operate within budgeted levels, and 22 to apply with any restrictions or limitations enacted 23 by the Legislature. 24 Further, the general expectation is that 25 state agencies and departments comply with the 26 legislative intent. 27 In July it is also the time that the 28 development of the next year's Governor's Budget -- 9 1 proposed budget starts to kick off. 2 Departments work with the Department of 3 Finance through the fall to produce the next year's 4 budget. And the cycle begins all over again. 5 Now, regarding the '19/'20 fiscal year, 6 which is coming up just next week, the total state 7 budget is $213.5 billion. That's comprised of both 8 general funds and special and bond funds. 9 The state general fund portion of the budget 10 is $147 billion. And the majority of that is for 11 education and health in human services. 12 The special fund and bond budget is 66.5 13 billion. 14 The 2019/'20 budget for the Board of 15 Equalization is $29.9 million; which is comprised of 16 $26.6 million for salaries and staff benefits, and 17 $3.3 million for operating expense. 18 MS. COHEN: I'm sorry -- three point what? 19 MR. MERCER: Three point three million -- 20 MS. COHEN: For operating? 21 MR. MERCER: For operating expense. 22 This ends my presentation. And I can answer 23 any questions that you may have. 24 MS. COHEN: I just wanted to make sure I 25 heard correctly. So the BOE's budget is $29.9 26 million. 27 MR. MERCER: Correct. 28 MS. COHEN: And you said of which 26 point 10 1 what is salary? 2 MR. MERCER: Six. 3 MS. COHEN: Thank you. 4 And 3.3 is for operating? 5 MR. MERCER: Correct. 6 MS. COHEN: Thank you very much. 7 Colleagues, are there any questions about 8 the budget? 9 Mr. Schaefer, is that a signal down there? 10 MR. SCHAEFER: I have no questions. But 11 thank you for coming. 12 MS. COHEN: All right. 13 Mr. Gaines. 14 MR. GAINES: No, thank you. I appreciate 15 the clarity. 16 One thing I would say, if I could. 17 MS. COHEN: Yes, please. 18 MR. GAINES: Because I'm just -- and maybe 19 we'll hear more in the Executive Director's report. 20 But I am encouraged that we're making progress in 21 terms of our office space, and that Members are 22 finding space with reduced square footage, and that 23 we're saving taxpayer money. 24 And also the fact that we have proximity to 25 the Capitol, so that, you know, we can stay in 26 communication. We want to be transparent. We want 27 to be in communication with the Legislature and the 28 administration. 11 1 So the fact that we're able to be, you 2 know -- that I'm able to be within five blocks of the 3 Capitol is really important, and I know that's 4 important to my colleagues. And so I'm just happy 5 that we're progressing in that area. 6 And I know that, Brenda, you're working on 7 personnel, hiring those vacancies that we have. 8 MS. FLEMING: We are indeed. 9 MR. GAINES: And I think things are looking 10 up. And I'm encouraged and looking forward to 11 continuing in this direction with my colleagues. 12 MS. FLEMING: I appreciate that comment. 13 Thank you for that. 14 That's a good segue -- 15 MS. COHEN: If I may, I actually have some 16 questions I think that relates a little bit more to 17 assessors and some of the things I've heard on what 18 their needs are with staffing requirements. I'm 19 trying to understand a little bit where to interface 20 in the process. 21 How do we begin to approach the governor's 22 office for some more money to be allocated to the 23 county assessors to give them the level of support 24 that they need in order for them to continue to carry 25 out their services? 26 MS. FLEMING: Uh-huh. 27 MS. COHEN: So, for example, one of the 28 things we're hearing on a constant basis is assessors 12 1 need more appraisers. Or how do we begin to bump up 2 the salary for the appraisers that they do have so 3 that smaller counties are able to attract and retain? 4 I would imagine this is all related around 5 the budget. The Governor's Budget is a very robust 6 budget. Workers got pay salary increases. So how do 7 we begin to ensure that all the votes can benefit 8 from this rising tide? 9 MS. FLEMING: Exactly. So thank you for 10 that question. 11 I've invited CA President Ms. Leslie Davis 12 to join me, because there's two sides of this coin. 13 MS. COHEN: Okay. 14 MS. FLEMING: There's local funding process 15 also that Leslie can speak to more specifically. 16 MS. COHEN: So -- hold on a minute. I'm 17 familiar with the local funding. What I'm looking 18 for is some understanding of a pathway on state 19 funding. 20 Ms. Davis. Thank you. 21 MS. FLEMING: I don't want to jump in your 22 lane. 23 MS. DAVIS: In last year's budget, not the 24 one being adopted now, but last year's budget, the 25 governor included a program called the State County 26 Assessor Partnership Program where they funded $5 27 million allowing all counties to apply. No one to 28 get more than a $750,000 grant for a three-year 13 1 period. 2 This is the fourth iteration of a grant or 3 sort of funding system by the state to help county 4 assessors. 5 We had it in the '90s, we had it into the 6 early 2000s. Then, of course, the recession hit, and 7 the state pulled back all funding, a pilot program 8 about four years ago, and then this program. 9 What this is is a much smaller version of 10 the 1990s programs. The 1990s programs were funded 11 at about the $60 million mark. 12 And while for some counties that certainly 13 wasn't enough money, we do believe that there's 14 opportunity to work more closely with the Department 15 of Finance and with the state to help fund our 16 offices. Because, as you know, much of what we do 17 helps backstop that Prop 98 requirement for the state 18 to help pay for education. 19 But we do have a good working relationship 20 with the Department of Finance. We do have open-door 21 discussions with the folks who are responsible for 22 this. We keep working from our angle, and certainly 23 any support your Board can provide to help with that 24 funding, we would appreciate. 25 MS. FLEMING: And, Members, I'll continue to 26 work with Ms. Davis and with your offices as we look 27 for some other opportunities. 28 But as Ms. Davis suggested, you know, 14 1 working with the counties directly, but just from a 2 local government perspective, there's processes for 3 local government funding through the Legislature, 4 which includes the Department of Finance. And we 5 can -- I'm not prepared to get to the specific 6 details today. I don't have that material in front 7 of me. But I can walk you through what that process 8 is. And we'll continue to partner to try to achieve. 9 Because we do appreciate that we have 10 similar struggles with the staffing issue on both 11 sides of the county assessor's offices and us at a 12 statewide level to ensure that we can -- we can 13 provide the mandated services. 14 MS. COHEN: Thank you. 15 MS. FLEMING: So we will continue to focus 16 on that. 17 MS. DAVIS: Can I take you on a short 18 tangent? 19 MS. FLEMING: Mm-hm. 20 MS. DAVIS: Okay. Because we're now talking 21 about the tremendous strain that we will have on the 22 appraisal profession if the split roll initiative 23 passes when it gets on the ballot. 24 One of the things county assessors have been 25 studying relative to that proposal is what it will 26 take us to administer. Because that is our job, to 27 administer property tax law. 28 So we are developing extreme concern about 15 1 the difficulty to recruit appraisers to even have 2 qualified or competent appraisers available for us to 3 recruit. And that will be an issue not only for us, 4 but a continuing issue for the Board as well. 5 MS. FLEMING: Exactly. 6 MS. COHEN: Thank you. I appreciate you 7 highlighting that issue. We are very aware of it. 8 MS. FLEMING: Very much so. 9 MS. COHEN: Mr. Mercer, I do have a question 10 for you. I wanted to know if you would be able to 11 highlight what issues are being addressed globally in 12 the Governor's Budget. 13 MR. MERCER: To be honest, I haven't looked 14 into that specifically for the presentation today. I 15 was looking more at the general Board's budget, and 16 then just the process itself. But I can get back to 17 you on that. 18 MS. COHEN: I would appreciate that. 19 MR. MERCER: Sure. 20 MS. COHEN: Thank you very much. 21 So your presentation was a high-level 22 presentation about the Board. I was wondering if 23 there's any granular details that you could provide 24 us. 25 I mean, you told us what the budget is, and 26 you told us kind of the operating -- how it's broken 27 down into salaries and into operating. I was 28 wondering if there's any more color or context that 16 1 you can give us about the budget. 2 MR. MERCER: Nothing that stands out to me 3 right now. I mean, there are no major changes 4 between this year and next year. No major proposals 5 that were put forward. So it's pretty much as 6 business as usual. 7 MS. FLEMING: So if I may. 8 Thank you for that statement. 9 If I might just offer a little bit of 10 context. And, again, we'll come back with much more 11 specific detail. 12 But one of the things that Mr. Mercer 13 mentioned in his presentation was what we refer to as 14 the budget change proposals. And you may hear us 15 commonly refer to those as BCPs. Those change 16 proposals are, as was mentioned -- we use them and 17 Department of Finance uses them as decision 18 documents. 19 And so you put forth your justification for 20 why you need -- or some change in either staffing 21 levels or budget levels. So a component of that is 22 what we refer to as legislative BCPs. And it's 23 within the budget process, but there's a shorter time 24 for that. 25 That's important to us, because we have some 26 legislation that is being proposed. For example, 27 Senate Bill 791, which is on the certificated 28 aircraft. 17 1 So to the extent that you have legislation 2 that seems to be moving forward quickly, one of the 3 things that we do is do an analysis of all the bills, 4 of course. And if the workload -- if the bill 5 includes workload, that comes back to the BOE 6 program. 7 We, then, will look at that to make -- do 8 the analysis to determine what the impact is and how 9 many personnel -- PYs, personnel years, how many of 10 those resources, additional resources we would need. 11 So most of the time what we will do first is 12 to identify, based upon that workload, if it's 13 something that could be absorbed by the agency or 14 not. 15 To the extent that we can absorb it, because 16 it's, you know, routine work, and we're just maybe 17 adding just another, you know -- another box to check 18 off, we certainly, as all agencies, not just BOE, 19 will try to absorb the work. 20 Occasionally, you have new work that's going 21 to be added to the catalog of services that we 22 provide. And so in those cases is when we would then 23 ask for one of those legislative BCPs. 24 So, for example, for Senate Bill 791, staff 25 have already started their analysis and are in the 26 process of drafting a legislative BCP that would 27 identify, not just the workload, but how many people 28 would be needed to absorb that work. 18 1 And you also consider there the nature of 2 the work. So that will help us determine what 3 classification levels, if there's any, technology. 4 So whatever that new body of work brings to 5 the table, we will examine all that's needed, all the 6 state resources that are needed for that. 7 So that's just an example, Members. I 8 absolutely, with your permission, will come back to 9 it with a little more detail. Because we've got a 10 little bit more work to do in those lanes. 11 But as Ms. Davis also mentioned, that is the 12 same kind of process we would look at for split roll. 13 So we look at the huge magnitude of work. 14 So for something like Senate Bill 791, for 15 example, it would probably be a lesser number of PYs 16 that we would look for. But for something like split 17 roll, it would be pretty significant. 18 So I'd like to spend more time with you to 19 have a little bit more detailed discussion with you. 20 But that just gives you a little bit of an example. 21 Stealing your thunder -- 22 MS. COHEN: Question about Senate Bill 791. 23 Is this something that -- is this the 24 two-year bill? 25 MS. FLEMING: 791 is moving through the 26 process now, ma'am. 27 MS. COHEN: Moving through the process now. 28 MS. FLEMING: Mm-hm. 19 1 MS. COHEN: So you'll be bringing this back 2 to us next month, I would imagine, relatively. 3 MS. FLEMING: Mark provides the weekly 4 updates. And I think he'll cover it also in today's 5 updates. 6 MS. COHEN: Okay. 7 MS. FLEMING: And certainly in our weeklies, 8 I can sit down and give you more details on that 9 also. But, yes -- 10 MS. COHEN: One of the things that I was 11 looking forward to hearing in the budget presentation 12 as it relates to the Board of Equalization, this body 13 right here is new. So we don't have a good command 14 understanding about the budget and how -- who gets 15 what, and what the allocations are. 16 And I'm thinking about some of the 17 operational priorities, particularly as it relates to 18 the budget. We have $3.3 million for operation. 19 But, you know, I'm wondering how much of 20 that is like Web site compliance. I know that's a 21 big undertaking that you've been taking under. 22 MS. FLEMING: Mm-hm. 23 MS. COHEN: Taxpayer Rights Advocate Hearing 24 and taxpayer education. How much is that in the 25 budget? The presentation doesn't answer these types 26 of questions. 27 MS. FLEMING: That's not Steven's role, and 28 that wasn't the request that I'd asked him. I just 20 1 wanted him to give you a high-level overview of the 2 state budget process and the Governor's Budget. 3 I'll be happy, Chair Cohen, to come back and 4 just walk you through what the '19/'20 budget does 5 specifically, and how it's allocated to each of those 6 areas. 7 MS. COHEN: In partic -- 8 MS. FLEMING: But in general, ma'am, what 9 happens is the budget is organized -- the BOE budget 10 is organized by department. And so there's, you 11 know, for lack of boring detail of it, there's budget 12 codes. And each code is an indication of what group 13 or division of group or what work group -- where that 14 money is dedicated. 15 So all those services that are -- and 16 fundamentally, we're broken down into the Board 17 Member offices. And, again, it's the people portion 18 of the money, the personnel services, and the 19 operating expenses. 20 The remainder of the budget -- and I'll come 21 sit down with you for the specific proportions. 22 The remainder of the budget is going to be 23 broken out for the agency side that keeps that 24 program tax activity running. So there will be a 25 break out for the Executive Office, and all of the 26 staff that are -- and the services under the 27 Executive Office, including the TRA, including the 28 leg. group, and including -- 21 1 (Whereupon Mr. Schaefer and Mr. Gaines were 2 no longer present.) 3 MS. COHEN: Excuse me. I'm sorry. Have we 4 lost quorum? 5 MR. VAZQUEZ: We did. 6 MS. FLEMING: Yes. At this point, ma'am, 7 we're not noble on anything. Just status updates. 8 MS. COHEN: Okay. Thank you. 9 So, Ms. Fleming -- 10 MS. FLEMING: Yes. 11 MS. COHEN: One of the things that I'm 12 interested in is, for example, we had an extensive 13 conversation last month about -- and we will have 14 one, I think, again today about the assess -- 15 assessment surveys. 16 (Whereupon Mr. Schaefer and Mr. Gaines were 17 present.) 18 MS. FLEMING: Surveys. Correct. 19 MS. COHEN: And I'm curious to know, like, 20 how much of that is the budget, where -- where is 21 their need? 22 I would imagine, like most budgets, we 23 probably would be very blessed to have it -- and 24 fortunate if the governor were to allow our budget to 25 grow a little bit, which would increase our 26 efficiency in helping us honor our constitutional 27 functions. 28 But the assessor's handbook, for example. 22 1 Those updates, we know that they need to happen. We 2 know they're incredibly important and valuable. 3 MS. FLEMING: Yes. 4 MS. COHEN: I'd like to know how that 5 relates to the budget. 6 So this is just kind of giving you an 7 indication of what I'm looking to hear from the 8 information just to begin to understand a little bit 9 more how the budget works. 10 I'm also thinking in relationship to the BOE 11 strategic plan. One thing that I hear is, "Oh, it 12 may be out of the budget," or, "It maybe costs too 13 much," or, "It might be overburdensome." But I still 14 don't have a benchmark as to know where this lies in 15 the operation function of the budget. 16 And, of course, the Board Member training. 17 I'm always interested in that. Because this gives us 18 an opportunity to continue to grow in wisdom about 19 how state businesses function. 20 MS. FLEMING: Yeah. Duly noted. 21 MS. COHEN: Mr. Vazquez, did you have 22 something to say? 23 MR. VAZQUEZ: Just -- I would just make a 24 quick comment. I know you didn't come prepared, 25 obviously, into some of the nitty-gritty of it. 26 But just as you're going back and you're 27 meeting with the governor, just to echo some of the 28 things that you've heard here. 23 1 And the one specifically is that I know in 2 meeting with several of the county assessors up and 3 down the state, that's the big fear is that if this 4 split roll goes forward, they obviously are going to 5 need some more resources. 6 And even if it doesn't, even the folks -- 7 it's been difficult, I know, in talking to a lot of 8 the assessors up and down the state, that it's even 9 hard to maintain their current staff. 10 MS. FLEMING: Right. 11 MR. VAZQUEZ: Because the private market is 12 just sucking them up. I mean, they just -- it's hard 13 to keep them, because they're just not competitive in 14 their salaries. 15 MS. FLEMING: Right. 16 MR. VAZQUEZ: And I don't know if there's a 17 contingency plan from the governor on his budget 18 moving forward, especially if the split roll goes 19 forward. 20 MS. FLEMING: Mm-hm. And that's something 21 that we'll, you know, work with. 22 Like I said, we talked about what the 23 assessors, and what the Department of Finance -- 24 which, that's a part of our daily routine -- 25 MR. VAZQUEZ: Right. 26 MS. FLEMING: -- to have conversations in 27 one aspect or another in terms of how things are 28 currently standing and what's going forward. 24 1 What Steven and his shop does, and one of 2 the other players in this team is Ester Cabrera, who 3 is also part of, kind of, a financial management 4 team. Kind of the head and the tail of the coin 5 where Steven is looking at the budgeting side of it; 6 Ester -- there's some changes in dynamics, I realize, 7 organizationally. But the other side of that is the 8 expenses. 9 And so, again, we'll spend more time, you 10 know, getting to that level of detail so that we can 11 specifically get to your numbers. 12 But there are opportunities for us to work 13 with Steven's team, with Ester's team, the Department 14 of Finance on a regular basis. 15 And then Steven's team, along with Ester, 16 works inside a lot of the state's systems. We can 17 have more conversations about that. 18 Really, what the intent of this presentation 19 was, as we're moving forward, you know, as you 20 mentioned, Chair Cohen, you know, being new to the 21 agency and new to the state level, is really start to 22 lay these items for you foundationally. So you get 23 the overview of it. And then we'll come back and get 24 down to the specific details about how all those dots 25 are connected so that you are whole. 26 And then as you're having your meetings with 27 the Legislatures, with, you know, other electeds up 28 and down the state, you have a full, you know, 25 1 comprehensive perspective on how things work, and how 2 you navigate and move forward in that context. 3 MS. COHEN: Based on the -- the -- Mr. 4 Mercer's presentation, he kind of walked us through 5 how the Governor's Budget works, in terms of a time 6 line. When -- can you make a recommendation to us 7 when would be the best time for this body to engage 8 with the Department of Finance to support Ms. Fleming 9 with her engagement on the pursuits of -- of projects 10 that are within this -- within our priorities and 11 want funding for? Should we start that conversation 12 now for next fiscal year? 13 MR. MERCER: Absolutely. Absolutely. And 14 often we'll start in the springtime. Like the spring 15 of 2019 we started kicking off, looking at what 16 proposals we might have for the '20/'21 fiscal year. 17 MS. COHEN: Mm-hm. 18 MS. FLEMING: Correct. 19 MR. MERCER: So the earlier, the better. 20 The more time you have to prepare. 21 So, yes, now would be a good time for any 22 potential adjustments you'd like to propose. Now's a 23 great time to start. 24 MS. COHEN: Thank you very much. I 25 appreciate your presentation. 26 We can pivot to you, Ms. Fleming. 27 MS. FLEMING: So just a couple of other 28 comments. I wasn't sure if our guests were here. 26 1 MS. COHEN: Our guest is here. Senator 2 Stone is here. Would you like to -- 3 MS. FLEMING: So I'll just wrap up just a 4 couple comments, if you don't mind, just to the 5 points that Mr. Gaines commented on. 6 We have got the cost estimates on the office 7 relocation project. We've received the cost 8 estimates. We're glad to get that. The cost 9 estimates do cover the new reduced space for the 10 downtown offices and for the space at the Natomas 11 facility. 12 So we've provided that information along 13 with the Department of General Services, that 14 information has been provided to Department of 15 Finance. They need a little time, just so we're all 16 meeting, to work through the finalized detail. And 17 that should give us the opportunity over the next few 18 weeks to start moving forward. 19 Once -- because my intent was to give the 20 whole budget, so we could see what the cost of this 21 activity was. Make sure we can cover it. Not just 22 for the one-time cost, but the ongoing lease cost. 23 And so I'm going to refer to it as it's all looking 24 green now. We're in good shape. 25 And so we'll continue to work with you 26 individually to move forward. So just to keep you 27 updated on that. 28 One final note on the 2019 Taxpayer Bill of 27 1 Rights, Ms. Thompson and I, our TRA advocate will be 2 reaching out to you to talk about what -- what we 3 need to do to start planning and getting your input 4 for the plan for that Bill of Rights hearing. 5 Ms. Thompson has put together posters and 6 fliers. Those have been put together. Some of them 7 are in the lobby. Information is on the Web site. 8 So we just want to draw attention to it to give 9 maximum exposure and visibility to that hearing. 10 And, again, Ms. Thompson and I will join you 11 to have more discussions about what you'd like to see 12 as a part of that process. 13 MS. COHEN: Thank you. 14 MS. FLEMING: And since we have guests -- 15 MS. COHEN: Yes. 16 MS. FLEMING: -- that concludes this month's 17 hearing. 18 And, again, thank you, Mr. Mercer, for your 19 time. 20 MS. COHEN: Thank you, Mr. Mercer. Good to 21 meet you. 22 MS. FLEMING: Thank you, Members. 23 ---o0o--- 24 25 26 27 28 28 1 REPORTER'S CERTIFICATE 2 3 State of California ) 4 ) ss 5 County of Sacramento ) 6 7 I, Jillian Sumner, Hearing Reporter for 8 the California State Board of Equalization, certify 9 that on June 25, 2019 I recorded verbatim, in 10 shorthand, to the best of my ability, the 11 proceedings in the above-entitled hearing; that I 12 transcribed the shorthand writing into typewriting; 13 and that the preceding pages 1 through 28 14 constitute a complete and accurate transcription of 15 the shorthand writing. 16 17 Dated: July 12, 2019 18 19 20 ____________________________ 21 JILLIAN SUMNER, CSR #13619 22 Hearing Reporter 23 24 25 26 27 28 29